The Analysis Of Chinese Industry--Location Matrix Model Of FDI

Western majority FDI(foreign direct investment) theories emphasize the multi-national enterprises must have some monopolized competitive advantages. According to these theories, only enterprises of developed countries are capable of overseas investment while those of developing countries cannot afford massive-scale FDI. China belongs to the developing countries, if we apply western majority theories to the analysis of our FDI. undoubtedly the attitude to development of our FDI is pessimistic. However, this article will analyze our FDI from a new point, that is, effective capital theory. Effective capital means the capital to set up or enter value added chain of multi-nation industries by effectively integrating production elements. Our cross-nation enterprises can integrate various production elements to turn domestic effective capital into international or global effective capital. So, this article is to establish a matrix model of industry and location by use effective capital theory, and to proceed with statistical analysis of our current foreign-invested industry and location, so as to define direction of further adjustment of our current FDI industry and location.